Leave Policies in India

Mandatory Leave Policies in India

The annual leave entitlement in India varies based on employment type and applicable labor laws. Under the Factories Act of 1948, adult workers are entitled to one day of leave for every 20 days worked, which amounts to approximately 15 days of annual leave per year. These leaves are separate from public holidays, which are provided additionally.

Below is a summary of the different types of leave, their durations, and whether they are mandatory:

Public Holidays in India

Employees in India are entitled to several public holidays each year, which vary by state and are determined by both central and state governments. Below are the national public holidays for 2025:

Types of Leave in India

Sick Leave

Employees are generally entitled to 5 - 12 days of paid sick leave per year under state laws or employer policies, typically after a short service period. Sick leave is usually paid at the full daily wage, though requirements may vary by sector and employer. A medical certificate is often required for absences longer than 2–3 days, rather than a strict 48-hour rule. In the private sector, employers bear the cost, while provisions for factory and shop employees are governed by the respective Factories Act or Shops & Establishments Acts, which set minimum sick leave entitlements separately.

Paid Time Off

The employment contract in India mandates a minimum of 15 days of paid leave annually after completing 240 days of employment.Many organizations allow unused leave to be carried forward, often up to a maximum of 45 days. Paid time off requests must be made 15 days in advance and require approval from the employer, works committee, and manager for work continuity.

Maternity Leave

Female employees are entitled to 26 weeks (six months) of paid maternity leave for the first two children, while for subsequent children, the entitlement is reduced to 12 weeks. During the six weeks post-birth or miscarriage, working is prohibited. Compensation is 100% of the regular salary, contingent on 80 days of employment within the 12 months preceding the due date.

Paternity Leave

Government workers are entitled to a 15-day paternity leave. There is no legally mandated paternity leave regulations for private sector employees.

Parental Leave

There is no statutory provision for shared parental leave in India.

Family and Emergency Leave

Casual leave is provided for unforeseen personal events or emergencies. Employees typically receive up to 6 days of casual leave per year. This leave is not carried forward, encashed, or compensated upon termination.

Special Leave Types

Some companies provide additional leave options such as sabbaticals, career breaks, and study leave. These are not legally mandated and depend on the employer's policies.

Best Practices for Implementing Leave Policies in India

 
• Compliance: Ensure leave policies align with both central and state labor laws.
 
• Clarity: Clearly communicate leave entitlements, accrual rates, and procedures.
 
• Flexibility: Offer additional leave options where possible to accommodate employee needs.
 
• Documentation: Maintain accurate records of leave applications, balances, and approvals.

Providing Leave Benefits in India With an EOR

A competitive compensation package is critical to attract and retain the best talent, but every country different regulations, customs and expectations. That’s the advantage of using a trusted Employer of Record like Playroll to manage benefits for your global team. They can:

• ‍Handle the benefits admin: Playroll ensures compliant contracts with built-in statutory checks. Add region-specific premium benefits, while we handle administration and employee claims. Manage leave, expenses, and more – all in one easy dashboard.
• ‍Run global payroll: An EOR will act as your payroll provider, paying your employees on your behalf in the local currency. The company will also have in-depth knowledge of local tax codes, regulatory practices, and everything else that goes into managing global payroll.
• ‍Alleviate compliance concerns: Different countries each have their own federal and local laws governing employee payments. An EOR helps ensure that you are compliant with the unique set of laws for any country in which your company operates. This is extremely important since a compliance slip-up can result in heavy fines or even a lawsuit.